♪ manus: good morning bloomberg's middle east headquarters in dubai. annmarie hordern is beside me in london hq. your top stories this morning. job cuts deep in. american and united airlines/workers. payroll support isn't prolonged. steve mnuchin and nancy pelosi extend talks on a new stimulus deal. the fourth quarter starts with a major hiccup in tokyo. the stock exchange halts trading

for the entire day after its worst ever outage. the hardware breakdown is to blame. european leaders gather for a special summit in brussels. relations with china and sanctions on belarus top the agenda. isn't butecovery fund concerns linger. 9:00 in dubai. good morning. the risks of a government shutdown have been taken off of the plate. i have the image in my head between nancy pelosi and mnuchin. it sounds like the white house is moving forward. mitch mcconnell, are we closer to a deal? he says we are miles away. annmarie: he seems to be pouring cold water on that idea. the democrats did postpone that vote for the 2.2 trillion. maybe we can get something on foxbusiness. obviously, you don't want to hold your breath. already, strategists said that the growth for the year is going

to be dim because of this. what i'm focused on is these job losses. exploding. that is sounding an economic alarm of the real pain in the real economy, not the financial markets. manus: on the other side effect coin, we have bullard versus bargain. bullard is breaking away from the peers. the economy is recovering faster than we expected. bullard, he's saying the recovery is faster than expected. he has the contrary invoice. you can delay the stimulus. we can wait on fiscal stimulus. potential for one of those fumbles in terms of a narrative from the fed which alleviates the pressure on the politicians. good morning. annmarie: let's take a look at the markets. futures higher. we don't have a lot of movement.

there's a number of holidays. australian stocks are doing better. the focus is on the nikkei. it is changed right now. there is no trading. the exchange had an outage. trading will be down for the entire day. rollover the board. dollar down across all of g10 this morning. weakness against the yuan as well. that heightens how unlocked the ust is. crude holding above $40 a barrel yesterday. we saw that stockpile data showing a surprise drop. also, dollar weakness. i know you called the bond market a snooze fest. as we have been speaking about, tons of job losses. tens of thousands. disney announced it was slashing 28,000 roles. that was just the beginning of a painful 24 hours. continental improved a plan that

will affect 30,000 workers. jobs.te will cut 3000 800 goldman sachs plans to cut 400 jobs. the biggest losses came in the airline sector. american airlines and united announcing combined cuts of 32,000 employees. those numbers are staggering. the decision ramps up the pressure on secretary mnuchin and house speaker nancy pelosi. the haggling over $2.2 trillion economic relief backed by the democrats. the house leaders have postponed that vote. they gives them more time to reach the elusive compromise. our guest host. everybody hopes there's a fiscal deal. look at those job cuts that are coming down the pike. you start this fourth quarter. can you really afford to start the fourth quarter without being fully engaged with risk? is that a little too bullish a

scenario to look at the next 30 days? marija: good morning. i'm a strategist. path for constructive risk assets in the medium-term. there's a lot of volatility. there's a lot of politics. we have elections. we have the european summit. it will be choppy. longer-term, the economy is recovering very slowly, very unevenly. we have very supportive monetary policy. i would be very surprised if we don't get another fiscal package. we probably would. it will be torturous to get it but we will get there. there's lots of money on the sidelines. we know corporate have money. we know consumers have money. factorsination of those makes me constructive on risk

assets in the medium-term. annmarie: when you say you are optimistic, are you optimistic about a fiscal package getting done in the next 48 hours? or before the end of the year? probably thenk latter. it is politics. house -- the white politics dominates economics and 48 hours. in medium-term, you imagine there will be a package given the amount of suffering in the job market we are seeing. want you to hold onto your tech calls. i know it will permeate throughout the next 30 minutes. let's all take a breather. we know that. good. i'm glad that hasn't changed. we will come back to that in a moment. let's talk about cyclicals. given the progress stance you have, where do you want to be in

terms of cyclicals? we've had a couple people say they want to be longer on europe relative to the u.s.. does that work for you? do you differentiate differently? much.: maybe not that what i do like encyclicals is materials. the material space is very interesting for us. that links to our previous discussion. we expect materials and the metals space, it comes from government spending. we see that in china. things like chinese imports of metals, copper, aluminum is huge. we are seeing a lot of development there. in europe, a lot of infrastructure projects. boris johnson was talking build, build. that's his way of getting out of

the pandemic and re-engaging the economy. more comfortable area to belong. stocks have gone up a bit more already. we expect that to continue. stocksing material specifically. that is when we really like. annmarie: i know you prefer materials over energy. you still love the u.s. and em. with these jobs cups -- job cuts coming in the united states, do you think it's time to start moving away? marija: no. probably not. manus already alluded to us. of u.s. and part emerging markets indices. we expect a lot more strength there. lesspect that's a lot affected by job cuts in the real economy. thats part of the market

brings its own thing, secular trends. working from home and things like that. that will continue. we've seen how those sectors have been -- i don't want to call it lockdown proof. it has been performing quite well. i suspect that will continue for some time. marketll support that more than any other region. annmarie: our guest stays with us. a lot more coming up especially in tech calls. let's get the first word news with laura wright. laura: european regulators are set to start an accelerated review of the coronavirus vaccine from oxford university and astrazeneca. the rolling review allows regulators to see trial data while the government is still ongoing. widened theors have investigation into the incident that led to a halt in the trial.

the worst ever outage in japanese trading. the tokyo stock exchange has stopped trading for the entire day, giving no timeframe for when trading can resume at the world's third-largest spot. buying and selling will be frozen on the first day of the new quarter. previous outages only affected parts of the trading day. the format of the presidential debate is changing. that's after the first chaotic clash between president donald trump and joe biden. the organizers say they want to provide a more orderly exchange of use. i didn't says candidates should be able to speak uninterrupted. the trump campaign says rule changes are moving the goal post. global news 24 hours a day on air and at bloomberg quicktake, powered by 2700 journalists and analysts in 120 countries. this is bloomberg. ♪ manus: thank you very much. european leaders meet in

brussels amid growing concerns that the 750 billion euro recovery fund could be delayed. we discussed. this is bloomberg. ♪

♪ manus: this is bloomberg daybreak: europe. annmarie hordern alongside me in london. to europe and beyond. the leaders meet in brussels for a summit with the talks ranging from china to brexit. the meeting comes amid growing concerns that the 750 billion euro recovery fund could be delayed. stumblesation faces over the rule of law conditions. maria tadeo tracks every nuance from brussels. good to see you this morning. where are we in terms of this recovery fund? i thought we were there.

this is very europe. maria: [laughter] exactly. in market had already priced that we would be there by early 2021. that was the idea. the idea that the recovery fund would be operational by the start of the year. the commission would give you an upfront payment. by mid-2021, the money would flow to countries that need that funding like italy. it's europe. we hear from officials that they feel the implementation would take longer than that because there are still issues that need to be resolved. a crucial issue here has to do with with rule of law. youthinking here is that are the european union, you will give money out to a country like hungary, you have to have guarantees that they will respect fundamental democratic rights. that's the concern here. they don't have the guarantees they need. i spoke with the commissioner

who handles this issue. she told me the pressure on the money has to be there. we have to get guarantees. let's take a look. toi believe that we need increase the pressure also by means of money. who will decide on the possible function? it will have to be very well based on thorough analysis. that was the commissioner speaking to us yesterday. one issue, we have rule of law. we have money. we have guarantees. the european parliament would like to question the numbers here. they don't have a deal yet. what they think the recovery fund should work going forward. those issues mean there's a real risk that the recovery fund won't be operational. china?e: what about

that seems to be top of the agenda today. are there more restrictions to come with chinese investment into europe? maria: that's a good point. what we know at this point is that come friday, european leaders will very likely say in an official way that the relationship with china has to be recalibrated and rebalanced. that's a very clear goal now from the eu. it will be done. the 27th saying that tomorrow morning -- the key here is not just the language. but whether or not we will see more restrictions and whether we will see the european regulator allow more m&a between european companies to create the champions that politicians say we need. annmarie: we will be tracking the special summit throughout the day. thank you so much. great reporting and fantastic interviews. the imf says spain's recovery is under threat because of a second wave of infections. the government should not remove

fiscal support too early. spain prepares new targeted restrictions and hotspots such as madrid. spain had the highest number of cases in europe. our guest is still with us this morning. we had a special summit in brussels. it's not the agenda. the recovery fund and whether it is on shaking ground will set a gloomy backdrop to this meeting. where do you see this? in markets have priced this already. point in whaty you said is fudge. that's what happens in europe. expectations are high. there are hiccups. that's my expectation. torturousve a very few days, weeks, months. we know that money is needed and earmarked.

eventually, it will find its way to the economy. it won't be an easy path. it's usually a lot more difficult in europe than thehere else, given commissions, lots of countries. it will be difficult. it is a step in the right direction. markets really cheered the package. it's a great step forward. justll eventually -- we have to get through a few difficult weeks and months. manus: it will be a bumpy ride. a brief thought. i know annmarie wants to get into the stock story. any thoughts on christine lagarde's lean towards average inflation targeting? would it mean anything substantial to you if the ecb mimicked the fed? lagarde,or christine for the ecb, it would be

aspirational targets. european inflation has been below target for a long time. we will see weakness right now as well. probably mores signaling. i'm not entirely sure how much. questioning credibility. in europe, you will get more of that as well. think the ecb is trying to provide a lot of support. they signaled they can do more. they desperately need fiscal spending. for me, the rescue package is a lot more significant than whether it can be pushed through. i suspect it will be. how much work needs to be done to get it through is more important. annmarie: very quickly. story, all the gains to the stoxx 600 this entire century has been from dividends. without that, you could see real

losses in the ftse market. is it time to take money off of the table in europe? say, we havee to been fairly negative on european stocks for quite a while. for me, the key chart in europe is revenues in europe relative to the rest of the world. years, downward sloping line. the point you are making is that revenue in europe, earnings in europe are substandard. the companies are paying dividends. that's it really. with dividends being removed, it's a more difficult story. yes, we are very skeptical. manus: ok. we can come back to the skepticism on the u.k.. this is our guest host this morning. coming up, more on tokyo's trading halt. a system issue blamed for

shutting down the world's third-largest exchange. this is bloomberg. ♪

annmarie: good morning. exchange isock helping trading for the entire day after the worst breakdown it has ever suffered. the trade freezing on the first day of the new quarter, dampening investor sentiment. start of the golden in china. juliette saly joins us. what is the play in tokyo? what do we know? had this happen before. juliette: this is the worst halt we've seen in its history.

we've heard from japan exchange which runs tokyo stock exchange. they will try to resume trading tomorrow. they are saying it is a hardware problem. trying to make sure that people don't think it is a cybersecurity attack. investor sentiment is on edge after we saw hacking affect the new zealand stock market in august. the stock exchange buying and selling thousands of shares. we have been seeing some movement and derivatives including futures. other markets in the country including exchanges are also sustaining trading. this is coming on the day that investors were supposed to react to the survey that came out 10 minutes before the market was expected to open. showing an uptick in the large manufacturing sentiment. still well off of pre-pandemic levels. this is going to affect investor confidence. we've heard from a strategist at tokyo security saying this is very problematic. investor confidence gets

impacted. you could see some negative reaction in japanese stocks. much. thank you very let's see whether they can get us up and running by tomorrow. our guest host this morning. let's focus in on japan. we are getting ready for sue get. we understand that it will be a mirror of phnom x. worth of japanese stocks. triple the level of the boj intervention. how do you look at japan and the prospect of suga? marija: for us, it's not just for japan. for overall investment this year, it has been all about earnings. earnings have been fairly -- not strong. none of the region has strong earnings. relatively resilient.

they have performed well. reallys will have been bad in places like u.k. and japan. they struggled. for we really want to see us to get positive on the markets is some optimism on earnings. we look at earnings forecast, earnings expectations. they are quite negative and japan. politics. what we need to get, better earnings outlook. japan is still struggling. for us, it is delano. -- still a no. annmarie: there are still more pessimists than optimists. you are a pessimist on japan. outside japan, you like e.m.. you like tech. what other sectors in asia? asia, it is mostly tech. asian tech, we like that a lot.

that's a very interesting story for us. we suspect -- we know that investors have been super bullish on u.s. tech. we know it is very crowded. you can argue about valuation. it is quite stretch. i suspect that that case is probably less extended for asian tech. we know it had some setbacks with u.s. china trade war, u.s. trying to pressure chinese text out of the market. we suspect it is less crowded, less extended. i would like to venture a guess that chinese government is more likely to have its technology champion. there is an interesting story there. asian tech is very positive. semiconductor story. we like platforms. you are pouring into

our obsession with bifurcated tech between washington and beijing. up next, we look at what's going on in the united states. dividend and buyback limits extended by the fed. stay with us. this is bloomberg. ♪

annmarie:: 30 a.m. in the city of london. good morning. this is "daybreak europe." tens of thousands of job cuts and no fiscal support. american airlines and united laying off 32,000 people. steve mnuchin and nancy pelosi are still talking about stimulus relief. japan trading on hold. the fourth quarter begins with a major outage. the tokyo stock exchange is shut down with all trades frozen and

much of asia also shut for holidays. for aan leaders gather special summit in brussels. relations with china and sanctions on belarus are on the agenda. isn't --recovery fund you refocus -- [indiscernible] lots to digest. asia is pretty much flat given that we have this outage in tokyo. there are a lot of holidays on a number of exchanges. it is these job cuts for me. tens of thousands of job cuts. people are going to start seeing even more suffering. all of this just within 24 hours. manus: yes, there are some of the numbers. potentially 30,000 people. i think if you look at the past 24 hours, you differentiate

between political chaos of yesterday morning when we came to air and this morning with the market has bid on is really on the veracity of a fiscal deal. of fiscaltina difference between the republicans and the democrats closing in if the concertina market therefore the market can start with a certain amount of underpinning. asmarie: one thing for sure many will say this is crunch time for the stimulus deal. many were saying october 1 was going to really need to be the date to head because of what is going on with the airlines, but remember july, the $600 stimulus checks also never got a fresh start. so, it is 24 hour crunch time. all of these job losses, no fiscal deal all and we are 33 days ahead of the u.s. election. manus: let's put it into risk

perspective. let's have a look at it. the nikkei is closed with the outage in japan. the dollar drops. longou afford to not be risk in equity on the s&p 500? so, the fed actually extended dividends blockage and buyback blockage to wall street banks. that does not seemed to have stopped the market. the dollar drops. incourse, that reversed september. dollar the risk for the as you have 33 days left to run? have a look at wti and the treasury market. if you could wake-up the bond market, good luck. would it be 2.2 trillion dollars fiscal package? i love the swiss story, i just love it. they spent $98 billion

intervening in their market. big, badraid of the treasury manipulator? nobody is afraid of are they? annmarie: this market? are you thinking of going to switzerland, manus? manus: i can't get to switzerland because they have a two-week quarantine. i can't get there. it will all be virtual. washington is causing the stock market to go bid this morning. how does the fed see the world? the richmond fed president spoke to bloomberg. >> the economy took a deep dive and it did come back quickly when we open things up, but naturally you would expect to see that recovery be a little bit more gradual. where i see the real challenge is getting the last 5% of americans back to the workforce

and that is where i've got my focus. >> is that going to happen? what are ceo's and business leaders telling you about their plans to invest more money? >> there is a lot of uncertainty with the virus and the demand picture and what it is going to look like. i do think companies are streamlining within that context. 10%.g the last 5% or i'm starting to hear some amount of pivoting to tomorrow. what i mean by that is, ok, we are going to get that behind us, let's talk about where we go from here. i do think they have streamlined, but i'm hopeful you will see that starting to grow again. >> do we see significant growth in the coming year do you think? >> sure. first of all, you've got a significant drop, so we are going to grow out of that significant drop. i think you will see a very

strong third quarter, but even going into next year, part of the legacy of rounding over the comps we have from this year's you will see growth numbers that look strong. i look at more level than growth rates. i think the question then is going to be what do we look like year-over-year? theill think by the end of fourth quarter we will still be down year-over-year and it will be hard to get back to where we were until the -- sometime next year. >> is your forecast assuming we get a fiscal stimulus package? what if we don't? >> i don't try to assume anything in terms of what happens in washington one way or the other. they are talking and i think we will let them figure out whether there will be a stimulus package. if there isn't one in the short term, obviously there are people down on their luck who are going to get less support than they otherwise need. i'm more focused on some of the long-term issues or maybe even

medium-term issues. we have a lot of people who used to be waiters or working amusement parks who now of need new jobs and their classic next job would have been working at a retailer or maybe working at another restaurant. if those places aren't hiring, how do we get them redeployed? retraining, pell grants, getting them funded. those are the kinds of things that are important if we are going to bring the economy all the way back. >> another major issue and you have one of america's biggest banks in your districts, whether or not the economy can withstand as forbearance can come to an end and we see rising business debt and increase defaults for commercial real estate. how do you see that playing out? >> i do think the fiscal stimulus we have done has been quite helpful to the financial industry. there are people who are down on their luck who have gotten

stimulus payments and you see credit card outstanding's down. you have small businesses that got ppp money that would have gotten -- gone under. you have airlines that would have been much more significantly challenged had they not got the money they have gotten. woodnk so far -- knock on -- what i'm seeing from the banks is still pretty healthy. >> what about in terms of their loans and lending? there have been concerns in commercial real estate you are going to have a wave of defaults. >> i think there will be challenges in commercial real estate, particularly on the retail side. as you can imagine. but then the question is are those defaults going to overwhelm the capital of the system? my sense is that there has been a lot of capital building in the last 10 years and the exposure compared to the capital don't seem to compare. the richmond fed president thomas barkin. we did have some more breaking

headlines out of tokyo regarding the tokyo exchange, which right now is not trading at all. they are planning to replace the hardware and they are working to resume trading and they said the problem occurred when they were switching to the backup. they have shut trading today after talking to market participants. we will wait to hear more headlines and when we could possibly see trading resume likely potentially tomorrow, but they are working on it and it is shut for the entire day right now, the biggest outage ever for tokyo. let's circle back to the fed. the fed has extended restrictions on paying dividends and share buybacks. the constraints first announced in june will last until the end of the year, so really cash preservation for the u.s. banks. editor joinsonomy us now. what was the fed justification for this latest announcement taking this halt to the end of the year? inwell, you heard it there

michael mckee's interview with thomas barkin, the keyword word being uncertainty. that is something the fed is holding onto and their message. they cited it on wednesday saying the economic uncertainty as well as the need for the banking industry to preserve capital were driving this extension. there are some unhappy campers with this decision including the likes of j.p. morgan, which had interest inaled resuming buybacks and they are likely to be disappointed. there was one dissent from brainerd. she had said in june that allowing capital distributions to show we have not learned the lessons from the global financial crisis. she was pushing for more restrictions and said that it rates a significant risk, these small allowances for distribution, significant risk that the banks will need to raise capital or curtail credit at a challenging time. as you might imagine, some

democratic lawmakers are pushing for more restrictions. so, there are likely to be some unhappy customers, but for different reasons. some saying too much, some saying never enough. beus: it is going to interesting to see how the snb and europe reacts, laying the groundwork for them to continue their pullback on the dividend guided. any idea in terms of when this might potentially be removed? it is like a piece of string, isn't it? >> certainly hard to predict. we know that banks are working on a second round of stress tests for this year which has not happened before. the fed has never tested them twice in a single year and these are tailored to pandemic conditions. we had the vice chairman say it willuld go that this influence the fed's decision on what to do next in the first quarter of 2021.

he also said he hopes the test results will allow the industry to return to regular order. we do know this stress test results, we expect to see them before the year end. they colleague reports, will be made public this time, so a lot to pour over, but this is what we know for now. much, ok, thank you very keeping it real on the dividend front and buybacks, our senior economy editor. let's get you up to speed, first word news with laura wright. leaders.s. house postpone development we democrat only stimulus plan because speaker nancy pelosi and treasury secretary steven mnuchin have been given one more day to negotiate a compromise. president trump has ordered a stopgap funding bill to avert a shutdown of the federal government. -- 7 -- 7500usand

employees have been shifted and more are likely to follow in the coming weeks as the end of the transition period looms. president emmanuel macron is calling for a cease-fire between armenia and azerbaijan. is president of azerbaijan saying it will continue until the armenian forces leave the disputed territory. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. annmarie: laura wright, thank you. up, and unusual direct listing. we talk about that next. this is bloomberg. ♪

manus: it is "bloomberg daybreak: europe." a hot market for new technology stocks, it was palantir's turn to take the spotlight. the debut was not a complete showstopper. the company failed to capture the previous valuation. the data at olynyk's company fell 5% on its debut. erik schatzker spoke to the cofounder of palantir about the debut on the new york stock exchange. >> five years ago in silicon valley, you had money pouring in from china. you go through these things in silicon valley where things are

overvalued. manus: we know that you like tech. can we circle back to some of the other big things? u.s. regulators pull the brakes on dividends in the united states of america. socgen and santander. un ecb making banks -investable. have we already reached un -invest ability in european banks? >> absolutely, absolutely. 100%. is way we think about banks banks particularly in europe with lending being such a big part of their business is they need to have high interest rates to keep the yield curve and the

ecb completely rules that out, so banks are very difficult to buy in. what we are seeing recently is that banks are finally lending. thanks to government guarantees, they are lending, but they are not making money. the flat yield curve is really challenging. what we are going to see next is that the quality of the loan books will only go down. we are still in recession, the economy is still slowing. profitableless lending. operation, that is not sustainable. now with dividends, you have to pay me to get banks on my balance sheet. [laughter] annmarie: pay you? another no. i know you are quite bullish, but a lot of no's this morning.

>> part of the market you want to in and part of the market you absolutely don't want to be in. annmarie: what would push you to want to in banks again? to come from movement -- manus: she doesn't want banks, annmarie. >> you look at higher interest rates. it is a commodities problem. if you wake up bond markets, i will be there. both of us. let's squeeze in. what does it take to squeeze in a bond market? >> that is a very, very difficult market. the fed talks about average targeting, average inflation targeting. for us, that is years away. inflation,high maybe. we don't see that and then next

year, the year after, the year after that. thank you so much for your direct no's today and your optimism. lookg up, we are going to more on tokyo's trading halt. a system issue blamed for shutting down the world's third-largest exchange read every single trade in tokyo is frozen right now. this is bloomberg. ♪

manus: it is "daybreak europe." how does the rest of the trading day look? you were going to get h&m, whether annmarie and myself bought enough?

9:00 a.m., we get the interview with the cfo. later in the day, bloomberg launches the year ahead. it is the virtual series. the new frontier of emerging technology and investment opportunities. is thee: tomorrow, it all-important u.s. jobs report, last one before the election. but losing steam. the tens of thousands we have , 1:30n the last 24 hours london time, initial jobless claims will be coming out that sets up the report tomorrow. let's get back to one of our top stories, one of the biggest exchange halts in living memory. the tokyo stock exchange has shut trading for the entire day. its operator that there was a hardware breakdown and gave no timeframe for when trading would resume. joining us to discuss is dani burger.

what is the sentiment? a lot of colorful comments coming out of tokyo. be a lot ofseems to frustration about this event. in the beginning, there was deafening silence. now a lot of the traders are questioning just how active they could possibly be, saying that the hardware issue switched. how hard could it be? how could they not have this prepared? another person said it is a comedy show and making my eyes water. it exposes justo antiquated the technology is in tokyo pieced together by chewing gum and rubber bands. you could hear in that the sense of frustration. they will hold a press conference later this morning,

but they will be holding at around 4:30 tokyo time. that is quite a while after the initial closure of the exchange. there are a lot of questions hanging in the air, when will this get fixed? what is laying under the hardware issue? if they hadn't tested at, that is problematic to a lot of traders. manus: you know what is even more frightening is what if this was the morning after the u.s. election? you know? this is when you begin to understand how risk can really fall apart and it may be why you are seeing such heavy trading in the u.s. equity futures because that is the natural place to go to. tokyo exchange president to at 4:30 p.m.glitch so, alex our producer along with abigail tracking the story inch by inch.

, what sort of backlash do you think there could be? >> your point is really excellent. when it comes to a backlash, let's keep in mind that a lot of the bigger firms to operate off exchanges in the dark schools because there is a really large retail presence on these exchanges. in terms of really any huge trades we are going to have, we likely won't necessarily see that. but as you say, if you are a smaller trader and you are operate on the exchange, perhaps you will start moving away. one source told me people are going to be voting with their feet, moving elsewhere, and not really using these exchanges. manus: thank you very much. let's see if we can get the hardware up and running.

fiscal unity, can we see it? on thee: the reality ground as american layoffs are exploding. u.s. futures optimistic. anna and matt. this is bloomberg. ♪

anna: good morning, welcome to "bloomberg markets: european open." the cash trade is just less than an hour away. here are your top headlines. .ob cuts deepen and nancy pelosi extend talks on a new stimulus deal.